Last week’s positive employment reports were good news for the economy, which typically causes mortgage rates to rise, but mortgage rates ended the week lower.
As of Thursday, Freddie Mac reports that the average mortgage rate for a 30-year fixed rate mortgage was 3.63 percent with borrowers paying their closing costs and 0.8 percent in discount points.
The average mortgage rate for a 15 year loan was 2.79 percent with borrowers paying their own closing costs and 0.8 percent in discount points.
Strong Retail Sales Show Consumer Confidence Improving
In other economic news, retail sales for February surpassed Wall Street expectations and grew by 1.1 percent against predictions of 0.5 percent and January’s reading of 0.1 percent.
Retail sales account for 70 percent of the U.S. economy and growing retail sales are a strong indicator of economic recovery, which generally causes mortgage rates to rise as bond prices including Mortgage Backed Securities fall.
With this strength in the retail sector, it may be a good time to consider locking interest rates for purchase and refinance transactions.
Results of Treasury auctions held Tuesday, Wednesday and Thursday were mixed.
Tuesday’s auction of 3-year notes saw average demand, Wednesday’s auction of 10-year notes was strong, and Thursday’s auction of 30-year bonds drew a weak response.
Financial Reporting Strong Across Multiple Indices
The Producer’s Price Index (PPI) for February met expectations at 0.7 percent and exceeded January’s level of 0.2 percent.
The Consumer Price Index (CPI) for February came in at 0.7 percent and exceeded expectations of 0.5 percent and January’s reading of 0.0 percent.
The Core CPI, which excludes food and energy sectors, demonstrates the impact of high fuel prices on the CPI with its lower numbers.
The Core CPI for February is 2.0 percent higher than for February 2012.
Upcoming Federal Reserve Meeting May Bring Interest Rate Changes
The Federal Reserve is not likely to modify its bond purchase program until the inflation rate reaches 2.5 percent.
Next week, the Federal Reserve will meet on Wednesday; investors will be waiting to see how the Fed responds to recent positive economic news in terms of potential changes to its bond purchase program, which is helping to keep mortgage rates lower.
As the deadline of March 27 for funding the Federal government approaches, investors will be following legislative talks to see how or if funding will be approved by the deadline.
U.S. Budget Stalemate, Italian Elections Stir Concerns
Mortgage rates worsened last week in response to more indications that the U.S. economy and global economic trends are improving. Global economic data was stronger than expected; which generally boosts investor confidence and leads to higher mortgage rates in Pennsylvania and across the country.
Mortgage rates worsened last week amid evidence of an improving economy. Conforming mortgage rates climbed in Pennsylvania and nationwide, rising to a 4-month high.
Mortgage rates rose last week as investors gained confidence in the global economy. China and Europe posted better-than-expected manufacturing rates, U.S. Jobless Claims fell for the second straight week, and the worst of the European debt crisis appears to have passed.
Mortgage rates rose last week nationwide during a week of sparse economic news.
Mortgage rates in Collegeville rose during the first week of 2013.
Mortgage rates moved higher Wednesday up congressional leaders voted to avoid the “Fiscal Cliff”.